Children & Money

Logic tells us that children are immature and therefore may not be the best idea to let them manage money.

 

Do you agree?

 

I am in absolute disagreement over this belief. My belief stems from the following reasons/observations:

• Children in this age are so much more intelligent and mature
• Children will prosper and blossom if given the opportunity and guidance
• Children may not be the immature party with money. Adults can be as immature
• Sow a seed in their life so that they can be good stewards with the money

Personally I grew up being very careful with my money. Am not being a stinge but because am taught to manage my money carefully. I did not come from a rich family and therefore it is essential for me to learn to save. In the event of me needing money (for studies per say), then at least I am prepared to some extent.

 

The only setback was I was not taught or shown how to grow my money. My parents being from the old school only practises work hard and save your money. The rest of it is another story.

 

Teaching children about managing money though is not as simple ABC, it is not rocket science either. The best way to teach children about money is being a good testimony/example ourselves. Piggy banks and children can become best friends, a good tool for parents to use to being to teach the basic money management principles of getting, saving, spending and sharing money. As children are not born with "money sense.", they learn by what they see, hear and experience.

 

Blindly giving children money without educating them on the value and importance of managing them is not helping them. It’s like giving someone fish but not teaching them to fish. Involve your children when you draft your budget, make payment for bills, analyze your investments, etc.

 

Financial education and Financial awareness is one of the best gifts or legacy you can give to your children.

Expense Management

Expense Management may be a familiar word to many but also an alien word to many.

Do you manage your money? It is perhaps not the most important thing how much you earn but rather how do you manage your money. In terms of money there is only Income and Expense.

Do you manage your Expense? How do you do it? Budgeting is a good way to do it. There are many ways to manage your expenses thru the various tools, i.e. excel, independent softwares/applications.

Compare Mr. A that earns RM10000 per month but without expense management spends 80% of his income with Mr. B that earns RM5000 per month with expenditure of only 40% of his income. Who do you think will end up with more money in the bank in 10 years time?

Do not ignore the importance of time and compound interest. This is where expense management is important. It will decide if you have surplus or deficit.

Few suggested expense management tools available on the internet:

• Expensify >> http://www.expensify.com
• Moneystrands >> http://money.strands.com
• MyFinanceX >> http://www.myfinancex.com
• Expense Register >> http://www.expenseregister.com

If none of the above suits your cup of tea, you can always rely on Excel. Have a go at it. It is powerful, fun and flexible.

 

Tip: Expense Management is a habitual thingy. It requires discipline to do it. You need to make an effort to cultivate the habit. In the beginning, it is difficult (sometimes irritating) but once it is a habit, you cannot NOT do it.

Gold *bling bling*

Have you heard? Everyone is talking about Gold. Do you or have you invested in Gold?

There are 2 approaches to investing in Gold - physical gold or gold-account related.

If you are to invest in Gold, the recommendation is to invest in physical gold (999.9). There are many banks offering gold-account related. These are but "paper gold". There is no guarantee that the bank has the physical gold. Even guru "Robert Kiyosaki" says invest only in physical gold.

Between the time I invested in gold in 2008/9 to now, price has appreciated between 15-20%. The world economy is so volatile that whatever currency we are holding is subject to risk. If anything severe happens, "currency" is then nothing more than paper money without any value. Then again, buying gold is also a form of investment and as we are well infomed, there are no "Guarantees" in investments.

Since the early ages, gold has always and still is the true currency. Has gold prices gone up? Yes it has. Will it come down? Yes it may. As Robert puts, it, we never buy anything to keep forever. We always "buy to sell". Just like commodities or stocks, we identify the "low" prices to buy and then sell at "high prices".

There are numerous sites available on the internet for information, especially charts. For your benefits, below are some charts for your preliminary analysis...

Please be careful when buying gold as there are con-artists out in the market. Also, prices are always negotiable. Of course, storing your gold in a safe place is essential.

Anyone interested in investing in gold, please contact us at gloriouscash@live.com. We have well connected reliable and trusted suppliers at competitive rates.

Inflation - Stranger or Foe?

I suppose many of you are able to define or explain the word "Inflation". If you lookup this word in the internet or books, you will be blown away by the many creative definitions.

In my opinion, the simplest definition of Inflation is "time taken for the value of your money to halve", i.e. time required for your RM10 (example) to halve or the time required for prices to double (example - a bowl of RM5 noodle to double in price)

What is your inflation?

Yeah, I supppose the numbers you plucked from the papers are not exactly incorrect but neither are they correct (depends whether you believe the reports). There are however more than one category of inflation:

1. Country's Inflation
2. Personal/Individual Inflation

One common formula of calculating inflation is Rule of 72. For instance, if we assume the inflation rate to be 4%, then 72/4 is 18 - it will take 18 years for the value of your money to halve or 18 years for price of items to double.

However as wise consumers, we are all aware that this is not true. How much was a bowl of noodles 5 years ago? 3 years ago? 1 year ago? So can our country's inflation possibly be 4% and below?

Personal Inflation

There is another inflation that many of us are not aware of - Personal Inflation.  Do you budget or itemize your expenses? If you do, try analysing it. How much did you spend (in general) in 2008? How much in 2009? From there you will be able to ascertain your inflation rate. Of course, if you wish, you can proceed into details - expenses by categories. You can then have an inflation rate for every category of expense. 

What this means is that your personal inflation rate is as important if not more important than our country's inflation. Thus, it is vital that you need to keep an eye on your expenses and income.

Did you just give me a number? Where did you get the number from? Did you get it from the papers or reports?

Financial Planning in a Nutshell

Financial Planning. A name so commonly associated with products in Malaysia.

What is Financial Planning? It is not a product directly or indirectly. It is more than that. It is a process.

Do you have any Unclaimed Money?

It will be really nice to suddenly find out that you have money to you, won't it? Maybe it belongs to a passed away loved one?

Have you searched the Registrar of Unclaimed Moneys?

Unclaimed money can be in various forms:

1. Life insurance policies
2. Share dividends
3. Dormant bank accounts
4. Unclaimed wages
5. EPF contributions
6. etc.

I believe we share the sentiment that to go to the Registrar to find out can be tedious due to the traffic, time constraint, efficiency of the staff there, etc.

Well, there is a company that offers such services now - UMA Compliance and Administration Sdn Bhd (Umaca).

Of course being a private entity, they may charge you some fee subject to their terms and conditions. 

Check out their website: UMACA 

Medical BOMB

If you or have family that have been to hospital to seek treatment, you will know the cost of treatment is anything but CHEAP.

Recently due to my wife's fractured ankle, we have been to medical center a few times. Fractured ankle is not a critical matter medically but the bill has been "High" nonetheless. I confess that I am grateful that we are medically insured else I will be crying....

So what is the meaning of "insured"? To me it basically means transfering my financial risk to a 3rd party. To most people, insurance is an expense that is unnecessary. I cannot understand how people can be so foolish. Do they not realize that if this is an "expense", this will be the only expense that will pay for all the other Expenses?





I have lost count of the number of people who came to me to seek help on their insurance. Because they had no proper & adequate contingency financial plan, some have had to:

• Opt for cheaper treatment though it is not the proper treatment
• Spouse returning to workforce to finance family needs
• Selling assets, i.e. house, car
• etc.

As I pay the bills, I cannot help but think of the poor folks that isn't financially prepared for this. They may be literally poor or mentally poor (due to their choice in assuming nothing bad will ever happen to them).

Remember this folks. Not being prepared is like jumping out of a plane without a parachute or a working parachute. Rest assured you will never need it again!

Make the wise decision. The impact & consequences is limited not only to you but your loved ones too.

Planning

In NickG, we Plan for the Best & Plan for the Worst. It is better, don't you think?



For assistance contact us at gloriouscash@live.com

Creative Finance ?

Financial Designers are sometimes required to think creatively.
At NickG, we do that !

MEDICAL Insurance - WHAT You Need To Know

Do you expect your medical insurance to pay 100% of your bills or you are able to claim the "sky-high" benefits?


DO NOT leave to chance or assumptions. In a nutshell, be aware of the following:

 

• Co-insurer clause – do you have to share the bill? If yes, what percentage?
• Annual limit / lifetime limit – marketing purpose or actual benefit?
• Termination clause - under what circumstances can your insurer terminate your benefits?
• Independent or Accessory benefit? - are you expected to pay extra for plans that you do not need just because you are needing medical benefits?
• Exclusion clause - what are you not covered?
• Waiting period - in Malaysia, there is a 30 days waiting period whereby insurers are not liable except for accident claims
• Cashless card applicable on weekends or public holidays?

 

For more information or assistance, please message us via NICKG FB or email gloriouscash@live.com

 

Windscreen Claims

Documentation required (may vary a little amongst companies)

 

 

1. Duly completed claim form
2. Police report
3. IC & driving licence of insured & driver
4. Updated vehicle registration card
5. Photographs before and after replacement of windscreen
6. Close up photo depicting the brand and make of the newly replaced windscreen
7. Original repair bill and tinting bill
8. Old tinting bill is required to support the claim for the tinting

WATCH this!

Visual Intro to Financial Planning

At NICKG, we are able to help you. For assistance or more information, please contact us at gloriouscash@live.com

We are Listening

Do you have anything to say? We are listening!

PRODUCT or GOAL ?

People often ask us " What product do you have"? They will then try to find a reason or create a goal to fit that product. Do you think this is the right approach?


We suggest 1) Identify your Goal/Concern/Objective ; 2) Find a Solution ; 3) Implement Solution

This way you will resolving the "actual" issue while not wasting your $$$ resources.

Contact us at gloriouscash@live.com to find out more

EMERGENCY Fund

If you currently don’t have an emergency fund or find it difficult to save money the key is to start small. You have to realize that accumulating one month’s worth of expenses will take some time, let alone three to six months. If you set your immediate goals to be small and manageable you will have a better chance in ...reaching them.



The best way to get started would probably be through your bank. Open up a new savings account if you currently don’t have one and begin to save with this first. The next step is to get into the habit of making regular deposits into this account. Whether it is weekly, bi-weekly or monthly, create a schedule and stick to it. Once you make saving automatic you won’t even have to think about it.

If you feel it is difficult to begin saving simply start with a small amount. Maybe you begin with $10 a week initially. While this won’t amount add up all that quickly the important thing is to start putting something away and to make it a habit. After a few weeks you won’t even notice that $10 missing so you can bump it up to $15 or $20 after a month or so. You will begin to get used to that money not being there and can slightly increase it again.

CHILDREN & MONEY

It is better to teach a man to fish than to give him a fish. Same applies to our children and money.


It is better to teach them about Money & Sterwardship than to give them money.
 
Money Stewardship for Children

HELP available

Parent Vs Child

1) Who is more important?



2) Who to secure first?


3) How to plan?

How BIG Should Your Emergency Fund Be?

Most experts agree to be 3 and 6 months worth of your living expenses. Amount is dependent on vary factors, i.e. children, debt, existing insurance coverage, etc.Most common reason of having 3 to 6 months of expenses saved up is sudden loss of income. If you/spouse loses a job you still have bills to pay and it may take a few months to find suitable new employment. It is best to plan for a worst-cast scenario so that the smaller emergencies such as replacing the hot water heater that just went out will be easily covered.See more

Emergencies Happen When You Least Expect Them

Life is full of the unexpected and it is for this reason you need an emergency fund. The best you can do is to prepare for emergencies that require access to additional money and having an emergency fund is the ideal solution.Financial emergencies can come in the form of a job loss, significant medical expenses, home or auto repairs or something you’ve never dreamed of. The last thing you want to do is be forced to rely on credit cards or a loan which could simply compound the problem